Ride-Share Drivers Are Independent Contractors According To NLRB's General Counsel

Author:Mr Phillip Schreiber, Juliana Nwafor and Sara A Schretenthaler
Profession:Holland & Knight
 
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Phillip Schreiber is a Partner in Holland & Knight's Chicago office Juliana Nwafor is an Associate in Holland & Knight's Atlanta office Sara Schretenthaler is an Associate in Holland & Knight's Dallas office

Highlights

The National Labor Relations Board's (NLRB) General Counsel released an Advice Memorandum that concludes that drivers for a ride-sharing app are independent contractors and, therefore, not covered by the National Labor Relations Act. The General Counsel's analysis focused on the traditional common law factors for assessing whether a worker is a contractor or employee. The General Counsel's office of the National Labor Relations Board (NLRB) released an Advice Memorandum on May 14, 2019, concluding that ride-share drivers with the mobile ride-sharing app Uber are properly classified as independent contractors. The General Counsel issued the Advice Memorandum on April 16, 2019, in connection to three unfair labor practice charges filed against Uber Technologies Inc. The Advice Memorandum focused on "whether drivers providing personal transportation services using the Employer's app-based ride-share platform were employees of the Employer or independent contractors."

In determining that Uber drivers are independent contractors, the General Counsel evaluated the relationship between Uber and the drivers under the traditional common law 10-factor balancing test set forth in the Restatement (Second) of Agency and recently applied by the NLRB in SuperShuttle DFW, Inc., 367 NLRB No. 75 (Jan. 25, 2019). (See Holland & Knight alert, " NLRB Restores Common Law Agency Test for Independent Contractor/Employee Status Under NLRA," January 30, 2019.) The General Counsel gave particular weight to the degree of independence that the drivers exercised in performing their work and whether the drivers faced risks and opportunities inherent with entrepreneurialism in their work.

The General Counsel found that the drivers were free to decide how to best serve their individual economic objectives through choosing their work schedules, their work locations, which rides to fulfill through the Uber app and whether to work with a competing ride-sharing service. These factors provided the ride-share drivers significant control over their earnings and therefore encouraged...

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